National Bank of Ukraine lowers GDP growth forecast to 2.1% in 2025 and 2%-3% in 2026-2027

MOSCOW. July 24 (Interfax) - The National Bank of Ukraine has lowered its GDP growth forecasts to 2.1% in 2025 and 2%-3% in 2026-2027 due to the consequences of the crisis, damage to infrastructure and weak investment activity, Ukrainian media reported on Thursday.

"Economic recovery is forecast to be slower than last year: real GDP will grow by 2.1% in 2025. Going forward, the pace of recovery will depend on the course of the crisis," the regulator said.

The baseline scenario of the NBU's forecast envisages that the economy will gradually return to normal functioning and the economy will grow by 2%-3% in 2026-2027.

"At the same time, if conditions normalize quickly, private investment and consumption will increase significantly, offsetting the effects of the rapid fiscal consolidation, while GDP growth might reach 3%-3.5%," the regulator said.

Fiscal stimuli backed by international financing continued to support economic growth in H1, however economic growth was restrained due to the crisis.

Unfavorable weather has delayed the sowing campaign and hampered future harvests, which, coupled with the gradual depletion of inventories from the harvest gathered last year, was a drag on food industry and transportation.

The 2026-2028 budget declaration outlines two economic development scenarios: baseline and alternative.

The baseline scenario assumes GDP growth accelerates to 4.5% in 2026. If the crisis drags on, the alternative scenario sees economic growth slowing to 2.4%.

NBU officials said at a briefing on Thursday that they had in effect used the ongoing crisis scenario as the baseline scenario for next year.